This Blog is an informational site, which provide mainly Property News, Reviews, Market Trends and Opinions regarding the real estates of Singapore. All publications belong to their respective rights owners. We do not hold any responsiblity in the correctness or accuracy of the news or reports. 23/7/2007

Friday, October 17, 2008

UK Housing Prices May Decline Further

Source : The Business Times, October 16, 2008

Market to hit near bottom in late 2009: Knight Frank

(EDINBURGH) UK house prices may fall another 15 per cent by the end of 2009 following a similar drop in the past year as values slide back to 2003 levels, Knight Frank LLP said.

The slump will leave five million properties, or 24 per cent of the private-housing market, with a lower value than the purchase price, the London-based real-estate broker said in an e-mailed statement yesterday. Average prices won't recover to last year's peak until 2015.

'Our forecast suggests that we will be closing in on the bottom of the market during late 2009 or early 2010,' Liam Bailey, head of residential research at Knight Frank, said in the statement. 'We are now at least halfway through the process of price falls, with around 15 per cent of an estimated 30 per cent peak-to-trough decline already factored into prices.' Prices are dropping as the UK economy grows at a slower rate and banks grapple with the fallout from the credit crisis. Lenders approved 32,000 loans for house purchases in August, the least since comparable data began nine years ago, the Bank of England said on Sept 29.

The revival in prices will be led by luxury properties in central London, where values may get back to last year's peak by 2012, when the Olympics will be held in the UK capital. The recovery may take until 2019 in Northern Ireland, the broker said.

'The winners in this market will be anyone with equity who can buy over the next six months,' said Mr Bailey. 'Those requiring significant finance will be unlikely to be quick enough on their feet. Vulture funds and cash-rich individuals will be the first to benefit.' The value of newly-built apartments and houses has fallen 50 per cent or more in some regional cities, the broker said. 'It looks as if price declines are already coming to a close here.'

The price falls will be particularly welcomed by people who had given up hope of ever being able to buy their own home, said Knight Frank.

The biggest drop in property in values this year and next will be in Northern Ireland and Wales followed by London, said Knight Frank. The smallest declines will be in the north of England and Scotland, it said.

Development land values may slump 15 per cent next year after plunging 33 per cent from their peak already, said Knight Frank.

Agricultural land prices may drop 10 per cent in 2009 after peaking this year.